This is a call to action for the Aave community to signal the intention to add/or not AAVE as collateral only on the AAVE platform.
Here are the pros and cons of this addition that I have identified so far.
- At the moment AAVE has almost no liquidity. However this is about to change very quickly as Binance has scheduled the internal migration on October 12th and many other exchanges will follow suit in the next two weeks.
- The migration of the existing LEND collateral straight into AAVE. At the moment there is a significant amount of LEND just waiting for the transition as a collateral in AAVE. There is no point for the owners of that lend to convert to AAVE as they cannot deposit it back. They can stake it sure, but not everyone may want to stake AAVE, many may want to use it as collateral instead for other purposes.
Since the biggest problem is liquidity and pricing feeds it makes sense to wait until AAVE reaches a minimum threshold of daily volume of 20 mln USD/day. Once the threshold is reached, the AIP may be put up for a vote.
Nevertheless, we should at least signal the intent as a community so as to not waste time unnecessarily and assure other usage options for AAVE as its liquidity grows.